Gulf builders go on hiring spree despite Q3 slowdown

New RICS survey shows GCC-based construction firms are increasing headcount as they expect workloads to grow

A sharp pullback in profit margins in Q3 and an increase in payment delays was also highlighted in the survey across the Middle East.

By Sam Bridge

Thu 29 Nov 2018 02:32 PM

Gulf-based construction firms are increasing their headcount as they expect workloads to grow over the next year, according to a new survey by the Royal Institution of Chartered Surveyors (RICS).

The latest RICS Middle East Construction and Infrastructure survey results showed that although respondents reported a decline in activity during the third quarter, they are optimistic that workloads are likely to increase over the next 12 months.

The majority of respondents in Saudi Arabia (71 percent) and the UAE (55 percent) along with a significant share in Oman (45 percent), reported new hiring during the quarter to support future projects.

A sharp pullback in profit margins in Q3 and an increase in payment delays was also highlighted in the survey across the Middle East.

RICS said this can be attributed to the financial constraints faced by firms, which was described as a drag on activity by majority of respondents and is expected to persist despite expectations for increased workloads.

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The survey said 81 percent of contributors in Oman cited financial constraints as holding back activity in the country, while 88 percent cited competition as the main cause for the reduction in activity. Cost of materials and shortage of materials were also found as some of the main factors holding back activity.

Compared to other regions globally, there is no apparent acute shortage of any particular skill in the Gulf construction and infrastructure industries, it added.However, a lack of building information modelling (BIM) managers was highlighted by 47 percent of respondents in both Oman and the UAE, with 42 percent in Saudi Arabia reporting a shortage in construction managers.

The infrastructure market received nuanced reports from the contributors across the region. Harbours and ports were recognised as the segment that will see the greatest growth in output over the next 12 months from UAE respondents, while rail is expected to see the strongest growth in output in Saudi Arabia.

The most uniformity in responses was received in the type of infrastructure investment is needed in the region. Between 70-80 percent of contributors across the region see more of a need for new projects than for the repair and maintenance of existing infrastructure.